Tesla reports Q4 and Year End results

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After the market closed on Wednesday Feb 22 Tesla Motors reported results for the quarter and full year 2012.

Here are the key points: The full report can be found on the Tesla IR website.

  • Model S production rate ramped up to 400 cars per week. This equates to 20,000 cars per year.
  • Model S awarded Motor Trend – Car of the Year 2013
  • Tesla vehicles has covered over 40 million miles

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From the report:

Our most significant achievement in Q4 was the successful ramp of production volume to more than 400 vehicles per week for three consecutive weeks in December, and this has continued at a consistent rate in Q1. This has established a production level that will allow us to achieve our goal of 20,000 Model S deliveries in 2013. We produced over 2,750 vehicles during the quarter and more than 3,100 vehicles during the full year, while maintaining our stringent quality standards.

To quadruple the pace of production during the quarter, we dramatically improved our manufacturing processes, and made significant strides in improving initial end-of-line quality. We were also able to overcome many of our past supply chain challenges and methodically stabilized the supplier base.

In the quarter, we also began to scale our delivery strategies. Both personal home delivery and factory pick-up were very popular delivery options for customers. However, we faced some challenges scheduling deliveries near the end of Q4 as our peak production coincided with vacations during the holiday season. As a result, we delivered approximately 2,400 Model S vehicles during the quarter and about 2,650 for the year. We have improved the delivery process in Q1 of 2013, and will continue to make enhancements to the process throughout the year.

Growing Model S Demand

New reservation activity once again hit record levels during the quarter driven by holiday traffic to our stores, multiple Car-of-the-Year awards, the start of European marketing, and visibility of customer cars on the road and related word-of-mouth enthusiasm. As a result, we added more than 6,000 new reservations in Q4, up from almost 2,900 in Q3. During the quarter, we also announced a U.S. price increase for new reservations made after December 31st.

We invited a large number of reservation holders to configure their cars during the quarter. Converting these reservations to firm, non-refundable orders increased cancellations, as expected. After deliveries and cancellations, our net reservations at year-end, were over 15,000, up from about 13,000 at the end of Q3. New reservations continue at a steady, although slower pace in Q1 2013, as compared to December, due in part to the pull ahead of reservations into Q4 by customers seeking to avoid the price increase. Q1 cancellations are likely to remain elevated as the remaining older reservation holders are invited to configure their vehicles within a set time-frame or pay the higher price just like new reservation holders.

At year end, we had 32 stores and galleries around the world. We plan to open 15 to 20 more stores and galleries this year with about half the openings in Europe and Asia to support our expansion into these regions during the second half of 2013.

Quarterly results:

Total revenues for Q4 were $306 million, a 500% increase over Q3. During the quarter we delivered approximately 2,400 Model S vehicles. We delivered the remaining North American Signature Series cars and shipped exclusively cars with the 85 kWh battery pack. We also saw strong demand for options such as the Performance version and Tech Package. Finally, we sold most of our remaining Roadsters during the quarter.

In Q4, we completed various milestones under the Mercedes-Benz B-Class EV program which contributed to total development services revenue of $12 million. We also continued to deliver full electric powertrains at a steady pace to Toyota for the RAV4 EV program.

2013 O We plan to deliver about 20,000 Model S units in 2013. We expect to start the year with about 4,500 deliveries in Q1, as we gave the manufacturing team the first week of the year off to celebrate their accomplishments during 2012.

Outlook

We plan to deliver about 20,000 Model S units in 2013. We expect to start the year with about 4,500 deliveries in Q1, as we gave the manufacturing team the first week of the year off to celebrate their accomplishments during 2012.

We plan to start European deliveries of the Model S this summer and Asian deliveries later this year. We have now started delivering Model S with the 60 kWh battery pack. These cars have an EPA-rated range of 208 miles on a single charge. Delivery of cars with the 40 kWh battery pack is expected to begin later this summer.

As we enter 2013, production efficiency is improving substantially as labour inputs decline and initial end-of-line production quality improves. We expect first quarter material, labour and overhead costs to be substantially lower than in the fourth quarter of 2012, and for this trend to continue in 2013.

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